I am a partner at Phillips & Cohen LLP, the nation’s most successful law firm representing whistleblowers, and recently was named one of Lawdragon's 500 Leading Lawyers in America. I also was selected as "Whistleblower Lawyer of the Year" for 2012 by a national nonprofit group. Our cases have recovered more than $11 billion in civil settlements and related criminal fines. I helped one of my clients obtain the largest SEC whistleblower reward ever: $30 million. Phillips & Cohen represents whistleblowers around the world in “qui tam” lawsuits brought under the False Claims Act and claims made under whistleblower reward programs at the Securities and Exchange Commission, the Commodity Futures Trading Commission and the Internal Revenue Service. Our whistleblower cases have helped set records, including the two biggest healthcare fraud settlements ($3 billion and $2.3 billion) and the largest qui tam settlement by a defense contractor ($325 million). For our work on whistleblower cases, we were named to the National Law Journal’s elite “Plaintiffs’ Hot List”
five times between 2004 and 2012. www.phillipsandcohen.com. Twitter @FraudMatters.

The Bane of Romney's Investments: Whistleblowers

Taxes. Medicare. Off-shore manufacturing. This list of Mitt Romney talking points is also a rundown of the areas in which whistleblower allegations have touched Romney’s personal and professional investments. In ways unique to this presidential race, whistleblower allegations of fraud have impacted Romney’s fortunes in at least three significant matters.

In 2007, within months of Romney launching his first White House bid, a whistleblower from inside UBS’ secretive private Swiss banking group came forward to the U.S. Department of Justice with critical information of a sweeping tax evasion scheme that would ultimately lead to the unmasking of 33,000 wealthy US citizens skirting U.S. tax laws through private Swiss bank accounts.

Romney’s family assets at that time included a Swiss bank account with UBS — an account that was noted simply as a “money market” account on the 2007 disclosure form he filed with the Federal Election Commission without any mention that the account was in Switzerland. As a result of the UBS whistleblower’s revelations, many questions have been raised about why Romney had a Swiss bank account — whether it was properly disclosed to the Internal Revenue Service and whether it was used to evade U.S. taxes.

UBS paid $780 million to defer its prosecution for aiding in tax evasion and disclosed information on thousands of secret accounts to the IRS in 2009 under a settlement agreement with the U.S.

U.S. citizens who failed to include income from their Swiss accounts on their returns or who failed to file the Report of Foreign Bank and Financial Accounts (“FBAR”) faced a choice: Either roll the dice on getting prosecuted, or take advantage of the IRS’ partial amnesty program (the so-called “Offshore Voluntary Disclosure Program”) to disclose previously unreported accounts and pay up. Thus far, $5 billion has been collected under the IRS voluntary disclosure program, and numerous individuals have been prosecuted.

Romney’s UBS account in Switzerland, which held millions of dollars, was closed in 2010, according to the lawyer who manages Romney’s blind trust. For various periods starting in 2009, the IRS offered reduced civil penalties and a diminished risk of criminal prosecution to those who voluntarily disclosed off-shore accounts that hadn’t previously been reported to the IRS.

Romney has not released any FBAR forms or said whether he reported the Swiss account to the IRS during its active years.

Tainted Profits?

Romney’s business interests intersected with whistleblower fraud allegations well before his UBS tax woes, however. An early instance occurred in the mid-1990s when Damon Clinical Laboratories Inc., a medical testing company, paid the federal government a record $119 million to settle two whistleblower cases – including one brought by my firm, Phillips & Cohen LLP — and a federal criminal fine.

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What Mitt Romney is most concerned about is the the early release of the UBS Whistleblower, Bradley Birkenfeld, from prison. He was not due out until May of next year, after the election. But he was released early, on August 1, well before nthe election.

The fact of the matter is that the Bush Department of Justice tried to bury Birkenfeld in the run-up to the last election. He was a very real threat to the Republican candidates and the people close to them last time around, in 2008, and the Bush DOJ knew it. Is the stage set for a little well-timed payback to the Republican party?

Everyone, including myself, got terribly excited by Deputy Commissioner Steve Miller’s memo dated the 20 June 2012 detailing a thorough internal review of how the Whistleblower Program has been so thoroughly mismanaged by the IRS during the last 6 years.

However, some 2 months later it’s beginning to dawn on me….. hang on didn’t TIGTA and the GAO already undertake 3 detailed reviews of the failed IRS Whistleblower Program since its inception 6 years ago.

Why the need for a 4th review by the very organisation (IRS) who have so royally sabotaged the Whistleblower program in the first place.

Nobody’s actually had the wit and temerity to ask Steve Miller just how long is this current review going to take?. 6 months, 9 months 12 months. 18 months?1?!

Considering the IRS have taken 6 years to produce some credible regulations and they still haven’t finalised them in their entirety DON’T hold your breath!

The IRS is just gaming once again, buying it’s self time, to see what happens in the Joseph Insinga Case and what new legislative amendments Senator Grassley is proposing at the ’round table’ discussions.